Novastone Capital Advisors (NCA) partners with experienced operators to reshape the future of Search Funds. NCA’s Entrepreneurship Through Acquisition Program solves SME succession challenges, sustains business legacy, and drives growth.
Across the globe, small and medium sized businesses (SMEs) function as the backbone of our economies. They represent 99% of all businesses in the EU – two thirds of jobs in the private sector1 – and 99.9% of all firms in the U.S.2 Ensuring their business legacies is crucial for economic stability, and yet, as founders seek to step down, these companies are often faced with succession challenges.
Statistics have shown that while 60-70% of small business owners wish to pass their business on to the next generation, only 15% do so successfully.3 And even though planning for the future is essential for any company, as many as 52% of family business owners around the globe have not started to plan their succession, or have no solid plan in place4.
Christian Malek, the founder of Novastone Capital Advisors (NCA), is deeply familiar with succession challenges as his grandfather passed away while still running his company. “That experience helped me understand the importance of effective succession planning, especially in families – like ours – where the next generation may not be ready to take over,” he explained. “I started my career in investment banking in the low-middle market space and started investing in Search Funds in 2012, which evolved into a similar but harder to scale project to NCA.
After learning about the size of the succession issue and designing a more scalable model, we started NCA in 2019. This is because I believed that Search Funds could be adapted to attract experience and successful operators as the ideal solution for business owners facing a succession challenge. NCA streamlines the traditional Search Fund model to make it more accessible for all: aspiring operators, investors looking to support them financially, and business owners facing succession challenges.”
NCA offers a solution by way of its Entrepreneurship Through Acquisition (ETA) Program, which matches the next generation of business leaders with SMEs facing a succession challenge. After thoroughly vetting the candidates – less than 1% are accepted into the Program. NCA closely partners with these experienced, mid-career operators with deep industry knowledge to identify, acquire, and grow privately held companies across the U.S., Canada, and Europe.
Throughout the process, which can take up to two years, operators dedicate full time to the program and are supported by NCA’s in-house data, marketing, investor relations, M&A and legal services, all of which help them successfully locate and acquire a privately held low-middle market company in their respective country of search. Once a business has been acquired, the NCA team helps ensure a smooth transition of ownership and offers long-term support post-acquisition, assisting operators-turned-CEOs with managing and growing their companies.
NCA’s Program has grown rapidly and is active in Europe, the U.S. and Canada. In 2024 alone, the company has heralded nine strategic acquisitions, resulting in a total of 22 NCA portfolio companies since the Program’s inception. With over 40 international employees and an 80% success rate for entrepreneurs who reach the acquisition stage, the Program has become the largest of its kind globally, holding an estimated 20% market share – and it shows no signs of slowing down.
In a world of much uncertainty, NCA’s Program helps guide business operators seeking a path to business ownership, while also addressing immediate succession challenges for family-owned businesses. These meaningful results benefit all stakeholders, positively impacting local communities one business at a time, with a ripple effect that has a global impact.
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